[Extract.]
Mr. Pruyn to Mr.
Seward.
No. 31.]
Legation of the United States,
Caracas,
September 21, 1868.
Sir: In dispatch No. 19, dated August 6, 1868,
I had the honor to call your attention to a proposition of this
government in regard to the payment of foreign claims. (See dispatch No.
19, inclosure No. 2.) On August the 12th a collective note, (a copy of
which may be found in this dispatch, inclosure No. 1,) in answer to the
bases proposed by the Venezuelan government, (see dispatch No. 19,
inclosure No. 2,) was sent to the minister of foreign relations, signed
by the representatives of Spain, Italy, Great Britain, the United States
of America, the Netherlands, and the United States of Colombia. Knowing
that my action in this matter could in no way compromise my government,
I was induced to join in it to show my belief that the government of
Venezuela could not pay her outstanding foreign claims if the French
were to continue to receive seventeen per cent. of the import dues taken
at the custom-houses in
[Page 971]
La
Guayra and Puerto Gabeilo. The income of the government may be estimated
at not more than four millions of pesos.
Of this sixty per cent., or two million four hundred thousand pesos, are
required for its ordinary expenses, leaving forty per cent., or one
million six hundred thousand pesos, to go towards the payment of its
internal debt and foreign claims; the former including all kinds,
amounting to about seventy-five million pesos, and the latter, roughly
estimating unsettled claims, to eight million pesos. Now as there are
only four custom-houses which yield any considerable revenue, namely,
those at La Guayra, Puerto Cabello, Ciudad Bolivar, and Maracaibo, * * *
therefore, if the French are to receive seventeen per cent. of the
revenues of the two former, it follows of course that the government
will have little or nothing left to divide among the claimants of other
nations. But it is to be remembered that if the French can be induced to
give up their special advantages, the United States will be expected to
do the same, in order that all the foreign claimants may be placed on an
equal footing, if possible, in the terms of the collective note, (for a
translation of which see this dispatch, inclosure No. 2.) The answer to
that note may be found in inclosure No. 3, and a translation of the same
in inclosure No. 4. This government is, as I suppose, not in a position
to do anything. The election for President will take place not later
than November, and congress, it is said, will meet on the 15th of
December.
The Yellows, or partisans of the late government of Falcon and Bruzual,
are said to be actively conspiring with Curaçoa as their headquarters.
They still have two or three war vessels, which are said to be refitting
at Maracaibo.
Guayana has declared in favor of this government, a great acquisition of
strength.
The poverty of Venezuela is her strength. Her prosperity depends upon
agriculture. Commerce cannot flourish, except with the former;
agriculture has been almost distroyed by the civil wars, commerce
greatly depressed: consequently little revenues from custom dues, and
the treasury is almost empty. An honest and able administration has to
keep up a considerable army. The employés are put on half pay, but there
is no money left to pay the interest on the debt, external or internal.
The government now has possession of the three custom-houses at Ciudad
Bolivar, La Guayra, and Puerto Cabello; could they gain that at
Maracaibo, and obtain possession of the war vessels, their income might
come up fully to the amount of four millions, (pesos,) and they could
then safely reduce their army one-half, and thus considerably diminish
their expenses. Hoping, for the sake of both Venezuelans and mankind,
that a season of peace and prosperity is about to be enjoyed by this
long-suffering people, I have the honor to remain, sir, with great
respect, your obedient servant,
Hon. William H. Seward,
Secretary of State, Washington, D. C.
[Translation.]
Whereas the government of Venezuela is authorized by article 12 of
the law of the 14th of June, 1868, (in regard to the organization
and administration of the national treasury,) to adjust finally
pending claims, and to carry into effect the obligations against the
republic arising therefrom, the undersigned have the honor to state
to
[Page 972]
Señor Doctor Villégas,
minister of foreign affairs of the United States of Venezuela, that
they will submit to their respective governments the bases proposed
by that of Venezuela, in the circular of the department of foreign
affairs of the 4th instant, provided those bases be modified in the
following terms:
1. The settlement and liquidation of pending claims shall be
proceeded with at once by means of mixed commissions. Each shall be
composed of two individuals, one appointed by the government of
Venezuela, and the other shall be the representative of the
government interested in the claims, unless the latter should
appoint a special commissioner. In the cases in which the
commissioners may not agree, they shall establish the manner to be
adopted to obtain a decision upon the point in controversy. When the
respective commissioners agree in awarding any indemnity, they shall
fix the amount that ought to be paid, and shall issue a certificate
or title for the same in the form adopted by the mixed commission
that has acted in the adjustment of Anglo-American claims. There
shall also be issued titles for the amount of claims already
acknowledged, and for those that may be acknowledged in virtue of
another manner, agreed upon in any other convention of a previous
date.
2. The titles which are issued shall bear six per cent. interest per
annum, falling due and payable quarterly, and shall have for their
redemption, which shall take place in quarterly payments, a fixed
fund, equivalent to two per cent. of the capital of all the titles
issued, until the discharge of the whole debt. So that, the amount
of the claims acknowledged being known, six per cent. interest is
insured every year, and two per cent. for the redemption, or say,
eight per cent. per annum of the capital acknowledged as a fixed and
uniform fund until its complete extinction. The sinking fund being
augmented by the surplus that, on account of interest, remains on
hand, from the second quarter of the first year for the part
redeemed.
3. Said eight per cent. shall be denominated international-claims
fund, which shall form an assignment of the percentage of the import
duties at the custom-houses of the republic sufficient to produce
the sum necessary to cover the eight per cent. mentioned.
4. If the government of Venezuela accepts these propositions, they
shall be obligatory on the part of the republic as towards the
governments that may approve them.
The undersigned renew to Mr. Doctor Villegas the assurances, &c.,
&c., &c.
Doctor Gumllerio Tell Villegas,
Minister of Foreign Affairs of the United
States of Venezuela.
[Translation.]
Señor Villegas to Mr. Pruyn.
DEPARTMENT OF FOREIGN AFFAIRS, CENTRAL
BUREAU.
Caracas,
September 12, 1868, 5th
of the Law and the 10th
Federation.
The undersigned, minister of the foreign affairs of the United States
of Venezuela, had the honor to receive, in due course, the
collective note that, on the 12th of the past month the chargé
d’affaires of Spain, Italy, and Great Britain, the commercial agent
in charge of the legation of the United States of America, and the
consul general of the Netherlands, and the vice-consul of the United
States of Colombia, addressed to him.
Therein they manifested that they would submit to their respective
governments the bases of settlement proposed by that of Venezuela on
the 4th of August, provided that they were modified in the terms
expressed by them.
The provisional executive had trusted that the plan which had been
proposed to assign the ten per cent. of the ordinary import duties
of the custom-houses of the republic to the payment of diplomatic
claims, according to the proposition that was made to all the
parties interested, would be generally admitted. Certainly he knew
of the existence of the convention that appropriates seventeen per
cent. of the duties of La Guayra and Puerto Cabello to the claims of
France; but notwithstanding, he abounded in reasons to think that
she would accede to the modification of the settlement.
The chargé d’affaires of that country has not thought that the orders
to which he is
[Page 973]
subjected
would permit him to do more than to refer the principal question to
his government, and has continued demanding with earnestness the
resumption of the payments.
The executive has seen himself under the necessity of so promising;
and as he is thus deprived, in benefit of a few creditors, of what
he deliberated to grant to all, there is wanting for the present the
basis of his calculations.
He has decided to continue his exertions, in the hope of seeing
realized his original idea, to wit: that the ten per cent. be
accepted by all, offered for foreign claims. But while he does not
know what will be the termination of the negotiations that he has
undertaken, he cannot respond definitely in regard to the
particular.
If, unfortunately, it should not be conformable to his hope, he will
substitute another mode of payment that may be satisfactory to the
creditors, until the former one can be carried into effect.
This will not prevent the preparing for acting upon the claims of
each country, according to the special conventions that may have
been concluded, or may be entered into with them, they thus
respecting their rights and doing justice to all claims.
The undersigned renews to Mr. Pruyn the assurance of his
distinguished consideration. Union and liberty!
Mr. E. C. Pruyn,
Commercial Agent in charge of the Legation of
the United States.
